Bloomberg Surveillance · Tuesday, July 7, 2026
Michael Dart believes the US economy's steady nominal GDP growth over the past two years, despite supply-side shocks like tariffs and energy price spikes, is a testament to the Federal Reserve's effective policy under Chairman Powell. He contrasts this with the 1970s oil shocks, where restrictive monetary policy exacerbated the damage.
“So nominal GDP has been steady, but we've been moving through a blizzard of supply side shocks tariffs last year, a big energy spike this year that's now fortunately unwound.”
“So this backdrop of super stable, very steady, modest nominal GDP growth is a testament to the FED basically getting it correct. Under Chairman Powell, and we know that because we've moved through these shocks without the business cycle slipping away on US.”
“I mentioned this the last time I was on. It goes back to the Bernanki, Gertler Watson research of nineteen ninety seven where they looked back at the upheaval from the oil shocks of the nineteen seventies and can clue that most of that damage was due to the imposition of restrictive monetary policy.”